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Monday, July 15, 2013

Colgate gets aggressive to edge out P&G

Last week, when Procter & Gamble launched Oral B, its first toothpaste in India, perhaps no one else was watching it more closely than Prabha Parameswaran, the MD of rival Colgate, also the market leader in the Rs 5,000-crore oral care market.

Parameswaran's swift and noholds-barred retort to the P&G threat has by all accounts left the latter overwhelmed in the market.

A heap of 250-odd Colgate toothpaste packs greets customers at a leading supermarket in the suburbs of Mumbai. Almost each of the neatly stacked packs forming a mini-pyramid has either BOGO (buy one get one) printed on it or carries reduced price tags. Here and across 4.5 million retail outlets, elbowing P&G out of any shelf space. It is throwing toothbrushes, pastes, and brand events and promotions with trade partners, and discounts, all to deny or delay giving P&G even a toehold. Such promotional intensity wasn't there even two weeks ago.

"Several large retailers haven't even stocked P&G's new toothpaste as the margins offered were lower than Colgate and GSK," said two officials at leading supermarkets.

This is already turning out to be a costly battle â€” Colgate has hiked its advertising and promotion spends by 31% during the first half of this calendar year.